NEGOTIABLE INSTRUMENT

AY 18-19
ATTY. POLICARPIO

PHILIPPINE DUCATION CO., INC. VS. MAURICIO A. SORIANO ET AL.

G.R. No. L-22405 | June 30 1971 |39 SCRA 587

SYLLABI:

Statutes; Interpretation of statutes; Philippine Postal statutes being patterned after United,
States postal statutes are generally construed according to the latter.—It is not disputed that our
postal statutes were patterned after similar statutes in force in the United States. For this reason, ours
are generally construed in accordance with the construction given in the United States to their own
postal statutes, in the absence of any special reason justifying a departure from this policy or practice.

Negotiable instruments laws; Postal money order is not a negotiable instrument.—The weight
of authority in the United States is that postal money orders are not negotiable instruments, the reason
being that in establishing and operating a postal money order system, the government is not engaged in
commercial transactions but merely exercises a governmental power for the public benefit. Moreover,
some of the restrictions imposed upon money orders by postal laws and regulations are inconsistent
with the character of negotiable instruments. For instance, such laws and regulations usually provide for
not more than one endorsement; payment of money orders may be withheld under a variety of
circumstances (49 C.J., 1153). Philippine Education Co., Inc. vs. Soriano, 39 SCRA 587, No. L-22405 June
30, 1971

FACTS:

- April 18, 1958 Enrique Montinola sought to purchase from the Manila Post Office ten (10)
money orders of P200.00 each payable to E. P. Montinola. After the postal teller made the
money orders Montinola offered to pay for them with a private check.
- After being advised to see the chief of the Money Order division concerning payment of the
money order through check. Montinola left the building with his check, the ten money orders
without the knowledge of the teller
- Upon knowledge of the disappearance of the money order, postmasters were informed the
same day as well as banks to not pay anyone of the money orders when presented. The bank of
America received the notice after3 days
- April 23, appellant received the money order on the next day deposit the same with the Bank of
America, and one day after received the P 200.00
- Sept. 27 Soriano, Chief of the Money Order Division of the Manila Post Office notified the Bank
of America That the money order attached to the letter had been found to be irregularly issued
and had been deducted from the banks clearing account.
- October 12 1961 appellant requested to reconsider the deduction but it was denied
- Subsequently MOntinoa was charged with theft but was acquitted on the ground of reasonable
doubt

ALGARME DIGEST
 NEGOTIABLE INSTRUMENT
AY 18-19
ATTY. POLICARPIO

ISSUE:

- Whether the postal money order is a negotiable instrument

HELD:

- No. therefore it does not create a contractual relationship of debtor and creditor respectively,
between the government, on one hand, and the remitter’s payee/ endorsers, on the other. It is
to be noted in this connection that some of the restrictions imposed upon money orders by
postal laws and regulations are inconsistent with the character of negotiable instruments. For
instance, such laws and regulations usually provide for not more than one endorsement;
payment of money orders may be withheld under a variety of circumstances (49 C. J. 1153).
- Moreover, not being a party to the understanding existing between the postal officers, on the
one hand, and the Bank of America, on the other, appellant has no right to assail the terms and
conditions thereof on the ground that the letter setting forth the terms and conditions aforesaid
is void because it was not issued by a Department Head in accordance with Sec. 79 (B) of the
Revised Administrative Code. In reality, however, said legal provision does not apply to the
letter in question.

WHEREFORE, the appealed decision being in accordance with law, the same is hereby affirmed with
costs.

ALGARME DIGEST